SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of February, 2007
RYANAIR HOLDINGS PLC
(Translation of registrant's name into English)
c/o Ryanair Ltd Corporate Head Office
Dublin Airport
County Dublin Ireland
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F..X.. Form 40-F.....
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange
Act of 1934.
Yes ..... No ..X..
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82- ________
RYANAIR ANNOUNCES RECORD Q3 RESULTS
NET PROFIT RISES 30% TO EUR48M
FULL YEAR GUIDANCE RAISED FROM EUR350M TO EUR390M
Ryanair, Europe's biggest low fares airline, today (Monday, 5th February 2007)
announced record Q3 results. Net profit rose 30% to EUR48m., traffic grew 19% to
10.3m., yields were up 7% as total revenues increased 33% to EUR493m. Unit costs
rose by 14% as fuel costs increased 52% to EUR175m. Despite much higher oil
costs, Ryanair maintained a net margin of 10% in Q3, which is significantly
ahead of expectations.
Summary Table of Results (IFRS) - in Euro
Third Quarter Ended Dec 31, 2005 Dec 31, 2006 % Increase
Passengers 8.6m 10.3m 19%
Revenue EUR370.7m EUR492.8m 33%
Profit after Tax EUR 36.8m EUR 47.7m 30%
Basic EPS (Euro Cents) 4.79 6.18 29%
Announcing these results, Ryanair's CEO, Michael O'Leary, said:
"This exceptional 30% increase in Q3 profits during a period of higher oil
prices, intense competition, and 21% seat capacity growth demonstrates, yet
again, the robustness of Ryanair's lowest fare model.
"Scheduled revenues rose by 28%, thanks to a 19% growth in traffic and a better
than forecasted 7% rise in average yields. The 7% rise in yields largely
reflects the impact of competitors excessive and unjustified fuel surcharges as
well as revenues from checked baggage charges which were introduced in March '06
and lack of a prior year comparative in this quarter's numbers. We anticipate
that the baggage charges will encourage passengers to travel with fewer checked
bags thereby reducing the revenues from this source, and more importantly,
reducing baggage handling costs.
"Ancillary revenues grew by 61%, significantly faster than traffic growth,
thanks to a higher passenger spend, increased service penetration and receipt of
a one off settlement arising from an early contract termination by our hotel
partner. We expect to announce the selection of a replacement hotel service
provider before the end of March.
"Unit costs rose by 14% largely due to a 52% increase in fuel - which now
accounts for 40% of our total cost base. We are 90% hedged to 31st March '07 at
$73 per barrel. Our low cost base allows us to absorb these higher oil prices -
without imposing fuel surcharges - while still reporting record profits. We took
advantage of the recent oil price weakness to extend our hedging position for
fiscal 2008. We are now just over 50% hedged through H1'08, and 90% hedged
through H2 08 at 10% less than we are paying this year. Hedging at these rates
has enabled us to lock in significant fuel savings of approx EUR60m for the
coming fiscal year.
"Our new bases at Marseilles and Madrid are performing well. Advance bookings
for the Bremen base which starts in April are strong. We will increase our
Dublin base from 15 to 20 aircraft this Summer and the 22 new routes are already
booking strongly. We expect to announce a 19th base - which will be in
Continental Europe - before the end of February.
"Ryanair's customer service continues to deliver real benefits for passengers.
While our competitors maintain high and unjustified fuel surcharges, Ryanair
guarantees no fuel surcharges. Our on time performance is the best of any major
European airline. Our baggage charges are beginning to have the desired effect
with fewer passengers travelling with check in baggage. A growing number of
passengers are using our on line check in/ priority boarding facility, arriving
later at airports, bypassing check in queues and proceeding directly to the
boarding gate, where they are priority boarded and have their choice of seats.
We expect that the quantum of passengers opting for this service will continue
to grow, and we are looking to extend this service to passengers travelling with
checked in luggage to broaden its appeal.
"The recent hysteria in the UK about the impact of aviation on climate change
has been misguided and misplaced. Aviation accounts for less than 1.6% of
greenhouse gas emissions and, we expect, in time that the media and Governments
will focus on the causes of 98% of greenhouse gas emissions and not the aviation
industry. By investing in a fleet of brand new aircraft, valued at $10bn, over
the past eight years, we have reduced our noise and CO2 emissions by almost 50%
on a per passenger kilometre basis. The recent decision by the UK's Chancellor
of the Exchequer, Gordon Brown, to double the rate of departure tax in the UK
from GBP5 to GBP10 per ticket is bad news for British tourism and visitors. This
is just another tax on tourists. The fact that it represents a 35% rate of tax
on Ryanair's average fare of GBP28 shows how regressive, unfair, and penal it
is. Ryanair will continue to oppose these taxes on passengers travelling on
Europe's greenest, cleanest airline, and we will continue to highlight the fact
that aviation, at 1.6% of greenhouse gas emissions, is neither the cause of, nor
the solution to, climate change.
"We welcome the OFT's recent decision to refer the BAA airport monopoly to the
Competition Commission, and we hope that this review will lead to the break up
of this over-spending, inefficient monopoly. Despite the opposition of most
Stansted airline users (and the local community), the BAA continues to press
ahead with its gold plated second runway and terminal proposals. While they
admit that the runway itself will cost just GBP100m., the BAA propose to waste a
further GBP2.1bn. (three times the cost of Wembley Stadium) building a second
terminal and associated facilities. Ryanair believes that a second runway and
second terminal can and should be built at Stansted for approx GBP1bn., less
than half of the cost proposed by the BAA. Competition is the only way to
deliver these efficiencies, and the sooner BAA's monopoly over the London
airports is broken up the better.
"In November, Ryanair increased its stake in Aer Lingus, bringing its holding to
25.2% at a total cost of EUR342m. The EU Commission has decided to refer
Ryanair's offer to a Phase 2 review. Ryanair remains confident that its offer -
which will see lower fares, reduced fuel surcharges, and improved fleet and
passenger service - will be good for Aer Lingus' passengers, and good for
competition. At a time when the European Union is encouraging airlines to
consolidate, we remain confident that our offer for Aer Lingus will obtain EU
Commission approval following this phase 2 review.
"In the current (fourth) quarter, Ryanair continues to roll out substantial
capacity expansion. We expect passenger volumes to rise by 25%. Fuel costs will
remain high compared to last year. We now have some visibility over Q4 bookings
and anticipate that yields will be in line with last year, a better outturn than
the small decline we had previously expected. Our earnings in the fourth quarter
will also be positively impacted by the weakness of spot oil prices, which
significantly reduces the cost of the 10% of our volumes which were not already
hedged at $73 per barrel. As a result of this better than expected performance
in H2, we now expect that Ryanair's net profit after tax for the fiscal year
ended 31st March 2007 (which we previously guided to rise 16% to EUR350m) will
in fact rise by approx 29% to EUR390m.
"Ryanair recently received shareholder approval to complete a 2 for 1 stock
split, and we plan to implement this split on 26th February 2007. The purpose of
this stock split is to improve the marketability and liquidity of Ryanair's
shares, and the existing ratio of five ordinary shares to one ADR will be
retained".
Ends. Monday, 5th February 2007
For further information
please contact: Howard Millar Pauline McAlester
Ryanair Holdings Plc Murray Consultants
Tel: 353 1 812 1212 Tel: 353 1 498 0300
www.ryanair.com
The directors of Ryanair accept responsibility for the information contained in
this announcement, save that the only responsibility accepted by the directors
of Ryanair in respect of the information contained in this announcement relating
to Aer Lingus and the Aer Lingus Group, which has been compiled from published
sources, has been to ensure that such information has been correctly and fairly
reproduced or presented (and no steps have been taken by the directors of
Ryanair to verify this information). To the best of the knowledge and belief of
the directors of Ryanair (who have taken all reasonable care to ensure that such
is the case), the information contained in this announcement for which they
accept responsibility is in accordance with the facts and does not omit anything
likely to affect the import of such information.
Certain of the information included in this release is forward looking and is
subject to important risks and uncertainties that could cause actual results to
differ materially. It is not reasonably possible to itemise all of the many
factors and specific events that could affect the outlook and results of an
airline operating in the European economy. Among the factors that are subject to
change and could significantly impact Ryanair's expected results are the airline
pricing environment, fuel costs, competition from new and existing carriers,
market prices for the replacement aircraft, costs associated with environmental,
safety and security measures, actions of the Irish, U.K., European Union ("EU")
and other governments and their respective regulatory agencies, fluctuations in
currency exchange rates and interest rates, airport access and charges, labour
relations, the economic environment of the airline industry, the general
economic environment in Ireland, the UK and Continental Europe, the general
willingness of passengers to travel and other economics, social and political
factors.
Ryanair is Europe's largest low fares airline with 18 bases and 440 low fare
routes across 24 countries. By the end of March 2007 Ryanair will operate a
fleet of 134 new Boeing 737-800 aircraft with firm orders for a further 117 new
aircraft (net of planned disposals), which will be delivered over the next 5
years. Ryanair currently employs a team of 4,200 people and expects to carry
approximately 42 million scheduled passengers in the current fiscal year.
Sub-division of Ordinary Shares
At the Extraordinary General Meeting of the Company on 14 December, 2006
Shareholders approved a stock split whereby each Ordinary Share with a current
nominal value of 1.27 cent each would be divided into 2 new Ordinary Shares with
a nominal value of 0.635 cent each ("New Ordinary Shares"). Ryanair now
announces that the Sub-division will be implemented with effect from the start
of business on Monday, 26 February, 2007.
Details of the Sub-division
The effect of the proposal is that each shareholder will own two New Ordinary
Shares for every one existing Ordinary Share (or ADS as the case may be) held on
a record date of 23 February, 2007. Except for this change, the New Ordinary
Shares will in all other respects be the same as the existing Ordinary Shares.
Subject to market conditions, the aggregate value of each shareholder's holding
of shares should remain the same following the Sub-division. The underlying
interests of Shareholders in the profits and net assets of the Group will not be
affected by the proposed Sub-division and shareholders will have the same rights
and be subject to the same restrictions as under their existing holding of
Ordinary Shares.
The Sub-division will not result in any new shares being issued by the Company
or becoming available in whole or in part to the public.
Certificated Holders
New share certificates reflecting the New Ordinary Shares following the
Sub-division will be issued to Ryanair Shareholders on request in exchange for
their existing share certificates and as the Company's Registrars receive old
share certificates for the purpose of processing share disposals or transfers in
the normal course of business. Existing share certificates for Ordinary Shares
remain valid, but will represent twice the number of Ordinary Shares stated on
the certificate. With regard to the Company's American Depository Shares
(''ADS's''), the existing ADS ratio, where one ADS represents five Ordinary
Shares will remain. Following the Sub-division the number of ADS's held by an
ADR holder will be doubled.
Uncertificated holders
For holdings in uncertificated form, it is expected that the appropriate share
accounts in CREST will be credited with entitlements to the New Ordinary Shares
on 26 February, 2007.
New ISIN Code
The New Ordinary Shares have been allocated a new ISIN Code. This is
IE00B1GKF381. The SEDOL code is B - 1GK - F38 . These new codes will be
effective from commencement of dealings on Monday, 26 February, 2007.
Dealing and Trading in New Ordinary Shares
Application will be made in due course to both the Irish Stock Exchange and the
UK Listing Authority for the New Ordinary Shares to be admitted to dealing on
the Official List of the Irish Stock Exchange and the Official List of the UK
Listing Authority and application will also be made to the London Stock Exchange
for the New Ordinary Shares to be admitted to trading on the main market for
listed securities of the London Stock Exchange.
Dealings in the New Ordinary Shares are expected to commence on Monday, 26
February, 2007. Accordingly, the last day of dealing in the existing Ordinary
Shares will be Friday, 23 February, 2007.
Stock Split Timetable
Last day for dealing in existing shares Friday, February 23rd 2007
Listing Application Hearings Friday, February 23rd 2007
Record Date (6.00 p.m.) Friday, February 23rd 2007
Dealings in sub-divided shares commence
(8.00a.m.) Monday, February 26th 2007
CREST Accounts Credited Monday, February 26th 2007
Ryanair Holdings plc and Subsidiaries
Consolidated Income Statement in accordance with IFRS(unaudited)
Quarter Quarter Period Period
ended ended ended ended
Dec 31, Dec 31, Dec 31, Dec 31,
2006 2005 2006 2005
Operating revenues EUR'000 EUR'000 EUR'000 EUR'000
------- ------- ------- -------
Scheduled revenues 397,595 311,728 1,489,697 1,128,508
Ancillary revenues 95,168 58,972 259,489 188,352
-------- -------- ------- -------
Total operating revenues - continuing
operations 492,763 370,700 1,749,186 1,316,860
-------- -------- ------- -------
Operating expenses
Staff costs 56,856 41,071 170,700 124,717
Depreciation 36,619 31,300 108,242 92,637
Operating expenses
Fuel & oil 174,887 114,890 511,929 351,763
Maintenance, materials and repairs 10,846 7,663 32,159 24,438
Marketing & distribution costs 4,246 2,405 15,854 11,134
Aircraft rentals 15,457 10,279 40,851 31,016
Route charges 47,720 40,771 146,104 124,704
Airport & handling charges 65,584 54,009 204,682 164,048
Other 23,340 19,133 75,652 61,110
-------- -------- ------- -------
Total
operating
expenses 435,555 321,521 1,306,173 985,567
-------- -------- ------- -------
Operating profit before
exceptional items 57,208 49,179 443,013 331,293
Aircraft insurance claim - - - 5,939
-------- -------- ------- -------
Operating profit after
exceptional items -
continuing operations 57,208 49,179 443,013 337,232
-------- -------- ------- -------
Other (expenses)/income
Foreign exchange (losses)/gains (40) (658) ( 1,269) (195)
Gains on disposal of property,
plant & equipment - 911 - 895
Finance income 14,854 9,456 43,777 27,277
Finance expense (20,812) (18,324) (62,123) (55,123)
-------- -------- ------- -------
Total other (expenses)/income (5,998) (8,615) (19,615) (27,146)
-------- -------- ------- -------
Profit before taxation 51,210 40,564 423,398 310,086
Tax on profit on ordinary activities (3,478) (3,746) (46,541) (31,093)
-------- -------- ------- -------
Profit for the period 47,732 36,818 376,857 278,993
======== ======== ======= =======
Earnings per ordinary share
-Basic(euro cent) 6.18 4.79 48.82 36.43
-Diluted(euro cent) 6.12 4.76 48.54 36.23
Adjusted earnings per ordinary share*
-Basic(euro cent) 6.18 4.79 48.82 35.75
-Diluted(euro cent) 6.12 4.76 48.54 35.55
Number of ordinary shares (in 000's)
-Basic 772,745 768,029 771,859 765,831
-Diluted 779,992 773,326 776,369 770,125
* Calculated on profit for the year before exceptional items (net of tax).
Page 1
Ryanair Holdings plc and Subsidiaries
Consolidated Balance Sheet in accordance with IFRS (unaudited)
Dec 31, Mar 31,
2006 2006
Non-current assets EUR'000 EUR'000
------- -------
Property, plant & equipment 2,619,955 2,532,988
Intangible assets 46,841 46,841
Available for sale financial asset 364,989 -
Derivative financial instruments - 763
------- -------
Total non-current assets 3,031,785 2,580,592
------- -------
Current assets
Inventories 1,952 3,422
Other assets 54,007 29,453
Trade receivables 20,768 29,909
Derivative financial instruments 228 18,872
------- -------
Restricted cash 204,176 204,040
Financial assets: cash greater than 3months 527,085 328,927
Cash and cash equivalents 1,287,986 1,439,004
------- -------
Total current assets 2,096,202 2,053,627
------- -------
Total assets 5,127,987 4,634,219
======= =======
Current liabilities
Trade payables 64,226 79,283
Accrued expenses and other liabilities 537,536 570,614
Current maturities of long term debt 165,359 153,311
Derivative financial instruments 81,037 27,417
Current tax 43,920 15,247
------- -------
Total current liabilities 892,078 845,872
------- -------
Non-current liabilities
Provisions 26,491 16,722
Derivative financial instruments 68,256 81,897
Deferred tax liability 147,014 127,260
Other creditors 82,181 46,066
Long term debt 1,532,325 1,524,417
------- -------
Total non-current liabilities 1,856,267 1,796,362
------- -------
Shareholders' equity
Issued share capital 9,817 9,790
Share premium account 606,260 596,231
Retained earnings 1,844,480 1,467,623
Other reserves (80,915) (81,659)
------- -------
Shareholders' equity 2,379,642 1,991,985
------- -------
Total liabilities and shareholders' equity 5,127,987 4,634,219
======= =======
Page 2
Ryanair Holdings plc and Subsidiaries
Consolidated Cashflow Statement in accordance with IFRS (unaudited)
Dec-31 Dec-31
2006 2005
EUR'000 EUR'000
------- -------
Operating activities
----------------------
Profit before taxation 423,398 310,086
Adjustments to reconcile profits before tax
to net cash provided by operating activities
Depreciation 108,242 92,637
Decrease/(increase) in inventories 1,470 (5,570)
Decrease/(increase) in trade receivables 9,141 (5,222)
(Increase) in other current assets (25,776) 6,770
(Decrease) in trade payables (15,057) (33,596)
(Decrease) in accrued expenses (40,618) (45,283)
Increase in other creditors 72,571 16,052
Increase in maintenance provisions 9,769 7,118
Interest receivable 1,221 (7,654)
Interest payable 7,047 1,227
Retirement costs 494 441
Share based payment 2,747 879
Income tax 236 (2,440)
------- -------
Net cash provided by operating activities 554,885 335,445
------- -------
Investing activities
----------------------
Capital expenditure (purchase of property,
plant and equipment) (195,208) (315,005)
Purchase of shares classified as
available for sale (342,410) -
Movement in restricted cash (136) -
(Investment)/reduction in financial
assets: cash greater than 3months (198,158) 114,156
------- -------
Net cash provided by investing
activities (735,912) (200,849)
------- -------
Financing activities
----------------------
Net proceeds from shares issued 10,055 28,920
Increase in long term debt 19,954 120,134
------- -------
Net cash used in financing activities 30,009 149,054
------- -------
(Decrease)/increase in cash and cash
equivalents (151,018) 283,650
Cash and cash equivalents at
beginning of period 1,437,847 871,354
Effects of exchange rates on foreign
currency balances 1,157 904
------- -------
Cash and cash equivalents at end of period 1,287,986 1,155,908
======= =======
Page 3
Ryanair Holdings plc and Subsidiaries
Consolidated Statement of Recognised Income and Expense in accordance with
IFRS (unaudited)
Dec 31, Dec 31,
2006 2005
EUR'000 EUR'000
------- -------
Cash flow hedge reserve
New movements into cash flow hedge reserve 23,934 58,278
Movements from cash flow hedge reserve (44,000) (22,960)
------- ---------
Net movements into cash flow hedge reserve (20,066) 35,318
------- ---------
Net change in fair value of available for sale
financial asset 18,063 -
------- ---------
Income and Expense recognised directly in equity (2,003) 35,318
------- ---------
Profit for the period 376,857 278,993
------- ---------
------- ---------
Total recognised income and expense 374,854 314,311
======= =========
Reconciliation of adjusted earnings per share (unaudited)
Dec 31, Dec 31,
2006 2005
EUR'000 EUR'000
------- -------
Profit for the period under IFRS 376,857 278,993
Adjustments
-------------
Aircraft insurance claim - (5,939)
Taxation adjustment for above - 742
------- ---------
Adjusted profit under IFRS 376,857 273,796
======= =========
Number of ordinary shares (in 000's)
- Basic 771,859 765,831
- Diluted 776,369 770,125
Adjusted earnings per ordinary share
- Basic (EUR cent) 48.82 35.75
- Diluted (EUR cent) 48.54 35.55
Consolidated changes in shareholders' equity
Share
Ordinary premium Retained Other
shares account earnings reserves Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
------- ------- ------- ------- -------
Balance at April 1, 2006 9,790 596,231 1,467,623 (81,659) 1,991,985
Issue of ordinary
equity shares 27 10,029 - - 10,056
------------------------- ------- ------- ------- ------- ---------
New movements into
cash flow hedge reserve - - - 23,934 23,934
Movements from cash
flow hedge reserve - - - (44,000) (44,000)
-------------------------- ------- ------- ------- ------- ---------
Movement in reserves - - - (20,066) (20,066)
-------------------------- ------- ------- ------- ------- ---------
Net change in fair value of
available for sale financial
asset - - - 18,063 18,063
Share -based payments - - - 2,747 2,747
Profit for the period - - 376,857 - 376,857
------- ------- ------- ------- ---------
Balance at December, 2006 9,817 606,260 1,844,480 (80,915) 2,379,642
======= ======= ======= ======= =========
Page 4
Ryanair Holdings plc and Subsidiaries
Consolidated Income Statement in accordance
with US GAAP (unaudited)
Quarter Quarter Period Period
ended ended ended ended
Dec 31, Dec 31, Dec 31, Dec 31,
2006 2005 2006 2005
Operating revenues EUR'000 EUR'000 EUR'000 EUR'000
Scheduled revenues 397,595 311,728 1,489,697 1,128,508
Ancillary revenues 95,168 58,972 259,489 188,352
-------- -------- ------- -------
Total operating revenues - continuing
operations 492,763 370,700 1,749,186 1,316,860
-------- -------- ------- -------
Operating expenses
Staff costs 56,963 40,878 171,022 123,955
Depreciation 37,075 31,635 109,495 93,750
Operating expenses
Fuel & oil 174,887 114,890 511,929 351,763
Maintenance, materials & repairs 10,846 7,663 32,159 24,438
Marketing & distribution costs 4,246 2,405 15,854 11,134
Aircraft rentals 15,457 10,279 40,851 31,016
Route charges 47,720 40,771 146,104 124,704
Airport & handling charges 65,584 54,009 204,682 164,048
Other 23,340 19,114 75,652 61,047
-------- -------- ------- -------
Total operating expenses 436,118 321,644 1,307,748 985,855
-------- -------- ------- -------
Operating profit before
exceptional items 56,645 49,056 441,438 331,005
Aircraft insurance claim - - - 5,939
-------- -------- ------- -------
Operating profit after
exceptional items - continuing
operations 56,645 49,056 441,438 336,944
-------- -------- ------- -------
Other (expenses)/income
Foreign exchange (losses)/gain (40) (658) (1,269) (195)
Derivative financial instruments (12,187) - (12,187) -
Gains on disposal of property,
plant & equipment - 911 - 895
Finance income 14,854 9,456 43,777 27,277
Finance expense (17,026) (16,299) (53,099) (49,262)
-------- -------- ------- -------
Total other (expenses)/income (14,399) (6,590) (22,778) (21,285)
-------- -------- ------- -------
Income before taxation 42,246 42,466 418,660 315,659
Taxation (3,777) (3,876) (47,472) (31,725)
-------- -------- ------- -------
Net income 38,469 38,590 371,188 283,934
======== ======== ======= =======
Net income per ADS
-Basic(euro cent) 24.89 25.12 240.45 185.38
-Diluted (euro cent) 24.66 24.95 239.05 184.34
Adjusted net income per ADS *
-Basic (euro cent) 24.89 25.12 240.45 181.98
-Diluted (euro cent) 24.66 24.95 239.05 180.97
Weighted Average number of shares
-Basic 772,745 768,029 771,859 765,831
-Diluted 779,992 773,326 776,369 770,125
* Calculated on net income before non-recurring items(net of tax).
(5 ordinary shares equal 1 ADS) Page 5
Ryanair Holdings plc and Subsidiaries
Summary of significant differences between IFRS and US generally
accepted accounting principles(unaudited)
(A) Net income under US GAAP
--Quarter ended-- Nine months ended
Dec 31, Dec 31, Dec 31, Dec 31,
2006 2005 2006 2005
EUR'000 EUR'000 EUR'000 EUR'000
Net income in
accordance with IFRS 47,732 36,818 376,857 278,993
Adjustments
Pensions (107) (100) (322) (117)
Share based payments - 293 - 879
Capitalised interest (net
of amortisation) regarding
aircraft acquisition programme 3,330 1,690 7,771 4,748
Derivative financial
instruments (12,187) - (12,187) -
Darley Investments Limited - 19 - 63
Taxation- effect of
above adjustments (299) (130) (931) (632)
-------- -------- ------- -------
Net income in
accordance with US GAAP 38,469 38,590 371,188 283,934
======== ======== ======= =======
(B) Consolidated cashflow
statement in accordance with US GAAP
Dec 31, Dec 31,
2006 2005
EUR'000 EUR'000
Cash inflow from
operating activities 562,656 340,193
Cash (outflow) from investing activities (743,683) (205,597)
Cash inflow from financing activities 30,009 149,054
------- -------
(Decrease)/increase in cash and cash
equivalents (151,018) 283,650
Cash and cash equivalents at
beginning of period 1,439,004 872,258
------- -------
Cash and cash equivalents at end of
period 1,287,986 1,155,908
======= =======
Cash and cash equivalents under US GAAP 1,287,986 1,155,908
Restricted cash 204,176 204,040
Deposits with a
maturity of greater than three months 527,085 415,251
------- -------
Cash and liquid resources in
accordance with IFRS 2,019,247 1,775,199
======= =======
Page 6
Ryanair Holdings plc and Subsidiaries
Summary of significant differences between IFRS and US
generally accepted accounting principles (unaudited)
(C) Shareholders' funds - equity
Dec 31, Dec 31,
2006 2005
EUR'000 EUR'000
------- -------
Shareholders' equity as reported in the
consolidated balance
sheets in accordance with IFRS 2,379,642 1,950,538
Adjustments:
Pension 8,919 11,620
Capitalised interest( net of amortisation)
regarding aircraft acquisition programme 37,219 27,695
Derivative financial instruments (12,187) -
Minimum pension liability (net of tax) (4,295) (6,496)
Tax effect of adjustments( excluding pension
& derivative adjustments) (6,862) (5,628)
------- -------
Shareholders' equity as adjusted to accord
with US GAAP 2,402,436 1,977,729
======= =======
Opening shareholders' equity
under US GAAP 2,020,448 1,629,559
Comprehensive income
Unrealised (losses)/gains on derivative
financial instruments(net of tax) (20,066) 35,315
Net income in accordance with US GAAP 371,188 283,934
------- -------
Total comprehensive income 351,122 319,249
Share based payments 2,747 -
Available for sale financial asset 18,063 -
Stock issued for cash 10,056 28,921
------- -------
Closing shareholders' equity in accordance
with US GAAP 2,402,436 1,977,729
======= =======
Page 7
Ryanair Holdings plc
Management Discussion and Analysis of Results
Introduction
For the purposes of the MD&A all figures and comments are by reference to the
adjusted income statement excluding exceptional items referred to below.
Exceptional items for the nine months ended December 31, 2005 consist of a
receipt of EUR5.2m (net of tax) arising from the settlement of an insurance
claim for the scribing of 6 Boeing 737-200 aircraft. There are no Exceptional
items in the current year to date.
Profit after tax increased by 35% to EUR376.9m during the nine months ended
December 31, 2006 compared to last year. The adjusted profit for the nine months
increased by 38% to EUR376.9m.
Summary Quarter Ended December 31, 2006
Profit after tax increased by 30% to EUR47.7m, compared to EUR36.8m in the
quarter ended December 31, 2005. These results reflect a 7% increase in average
fares (including checked in baggage charges) and strong growth in ancillary
revenues, offset higher fuel costs, which increased by 52% to EUR174.9m, and a
one off step up in staff costs which rose by 38% to EUR56.9m due to an increase
in pilot crewing ratios. Total operating revenues increased by 33% to EUR492.8m,
which is greater than the 19% growth in passenger volumes, as average fares rose
by 7% and ancillary revenues grew by 61% to EUR95.1m. Total revenue per
passenger as a result, increased by 12% whilst passenger load factor, due to the
21% increase in seat capacity, decreased by 2 points to 82% during the quarter.
Total operating expenses increased by 35% to EUR435.6m, due to the increased
level of activity, and the increased costs, associated with the growth of the
airline. Fuel, which represents 40% of total operating costs compared to 36%
last year, increased by 52% to EUR174.9m due to substantial increases in the US
dollar cost per gallon, partially offset by a weaker US dollar and a 3%
reduction in fuel consumption due to the installation of winglets on the
majority of our Boeing 737-800 fleet. The remaining retro-fit winglets will be
installed across the fleet by fiscal year end. Unit costs, excluding fuel and
staff costs, increased by 4%. Staff costs rose by 38%, reflecting an increase in
pilot crewing ratios primarily as a result of increases in sector length. As a
result, operating margins decreased by 1 point to 12%, whilst operating profit
increased by 16% to EUR57.2m.
Net margins remained flat at 10% for the reasons outlined above.
Adjusted basic earnings per share have risen by 29% to EUR6.18 cent for the
period.
Balance Sheet
The strong growth in profitability continues to positively impact the balance
sheet with Total cash increasing by EUR47.3m to EUR2,019.2m despite acquiring a
25.2% stake in Aer Lingus for EUR342.2m and funding an additional EUR193.9m in
capital expenditure largely from internal resources. The Company debt financed
four Boeing 737-800 aircraft and funded additional aircraft deposits during the
period. Total debt, net of repayments, increased during the period by EUR10.1m.
Shareholders' funds at December 31, 2006 have increased by EUR392.7m to
EUR2,384.7m, compared to March 31, 2006 reflecting the EUR376.9m increase in
profitability during the period and the exercise of share options which
increased shareholder funds by EUR10.1m, offset by a reduction of EUR5.3m
resulting from the IFRS accounting treatment for derivative financial
instruments, financial assets, pensions and stock options.
Detailed Discussion and Analysis Quarter Ended December 31, 2006
Profit after tax, increased by 30% to EUR47.7m due to a 7% increase in average
fares (including checked baggage charges) and strong growth in ancillary
revenues, offset by fuel costs increasing by 52% to EUR174.9m primarily
reflecting the higher US dollar cost per gallon a 38% increase in staff costs
due to higher pilot crewing ratios, to EUR56.9m. Operating margins, as a result
decreased by 1 point to 12%, which in turn resulted in operating profit
increasing by 16% to EUR57.2m compared to quarter ended December 31, 2005.
Total operating revenues increased by 33% to EUR492.8m due to the combination of
a 19% increase in passengers carried, a 7% rise in average fares, and the growth
of ancillary revenues.
Scheduled passenger revenues increased by 28% to EUR397.6m due to a 7% increase
in average fares (including checked baggage charges) reflecting the benign yield
environment supported by competitor fuel surcharges. Passenger volumes increased
by 19% to 10.3m reflecting increased passenger numbers on existing routes, the
successful launch of our new routes and expansion of our bases. Load factor
decreased by 2 points to 82% during the period due to a 21% increase in seat
capacity.
Ancillary revenues continue to grow faster than passenger volumes with revenues
growing by 61% to EUR95.1m in the period. This performance reflects the strong
growth in on board sales, non-flight scheduled revenues, other ancillary
products and a one-off receipt of an early termination payment from our hotel
provider. Ancillary revenues continue to grow at a faster rate than passenger
volumes.
Total operating expenses rose by 35% to EUR435.6m due to the increased level of
activity and the increased costs associated with the growth of the airline,
particularly higher fuel and staff costs. Total operating costs were also
adversely impacted by a 6% increase in the average sector length, whilst higher
US dollar fuel prices were partially offset by the strength of the Euro to the
US dollar.
Staff costs have increased by 38% to EUR56.9m. This primarily reflects a 34%
increase in average employee numbers to 4,209 and the impact of pay increases
granted during the period. Employee numbers rose due to an increase in our pilot
crewing ratios reflecting increases in sector length. Pilots, who earn higher
than the average salary, accounted for 40% of the increase in employees during
the period.
Depreciation increased by 17% to EUR36.6m. There are an additional 13 'owned'
Boeing 737-800 aircraft in the fleet this year compared to last year. The
resultant higher depreciation charge was offset by a combination of lower
amortisation due to the retirement of Boeing 737-200 aircraft and the positive
impact of a new engine maintenance deal on the cost of amortisation of Boeing
737-800 aircraft. The strengthening of the euro versus the US dollar also had a
positive impact on the depreciation and amortisation charge.
Fuel costs rose by 52% to EUR174.9m due to a 25% increase in the number of hours
flown and a significant increase in the average US dollar cost per gallon of
fuel partially offset by the positive impact of the strengthening of the euro
versus the US dollar and a 3% reduction in fuel consumption due to the
installation of winglets on the majority of our Boeing 737-800 fleet.
Maintenance costs increased by 42% to EUR10.9m, faster than the increase in the
number of hours flown, due to a rise in the number of leased Boeing 737-800
aircraft from 17 to 30, partially offset by the improved reliability of the
Boeing 737-800's operated, a lower level of maintenance costs incurred due to
the retirement of the Boeing 737-200's and the positive impact of the
strengthening of the euro versus the US dollar exchange rate.
Marketing and distribution costs increased by 77% to EUR4.2m due to a higher
level of marketing activity and related expenditure compared to the previous
year as the number of routes operated rose by 64% to 381 at the period end and
the number of bases increased by 2 to 17.
Aircraft rental costs increased by 50% to EUR15.5m reflecting an additional 13
aircraft on operating lease during the period.
Route charges rose by 17% to EUR47.7m due to an increase in the number sectors
flown and a longer average sector length, offset by a reduction in enroute
charges in certain EU countries.
Airport and handling charges increased by 21% to EUR65.6m. This is higher than
the growth in passenger volumes and reflects the impact of increased costs at
some of our airports and in particular at our Dublin base, which has a
significantly higher cost per passenger, offset by lower costs at new airports
and bases.
Other expenses increased by 22% to EUR23.3m, which is lower than the growth in
ancillary revenues, due to improved margins on some new and existing products
and cost increases on some indirect costs.
Operating margins have decreased by 1 point to 12% for the period due to the
reasons outlined above which has resulted in operating profits increasing by 16%
to EUR57.2m.
Interest receivable has increased by 57% to EUR14.8m due to a combination of
higher levels of cash and cash equivalents and increases in average deposit
rates earned in the period.
Interest payable increased by EUR2.5m due to the drawdown of debt to part fund
the purchase of new aircraft during the period and higher floating interest
rates.
The Company's Balance Sheet continues to strengthen due to the strong growth in
profits during the period. The Company generated cash from operating activities
of EUR423.4m which part funded the investment in financial assets (Aer Lingus)
of EUR342.2m and capital expenditure during the period with the balance
reflected in total cash of EUR2,019.2m. Capital expenditure amounted to
EUR193.9m which largely consisted of advance payments for future aircraft
deliveries and the delivery of four aircraft. Long term debt, net of repayments,
increased by EUR10.1m during the period.
Shareholders' equity at December 31, 2006 has increased by EUR392.7m to
EUR2,384.7m, compared to March 31, 2006 reflecting the EUR376.9m increase in
profitability during the period and the exercise of share options which
increased shareholder funds by EUR10.1m, offset by a reduction of EUR5.3m
resulting from the IFRS accounting treatment for derivative financial
instruments, pensions and stock options.
Detailed Discussion and Analysis Nine Months Ended December 31, 2006
Profit after tax, increased by 38% to EUR376.9m due to average fares (including
checked in baggage charges) rising by 9% and strong ancillary revenue growth,
which was offset by fuel costs which rose 46% to EUR511.9m reflecting the higher
US dollar cost per gallon and the one off step up in pilot crewing ratios which
led to staff costs rising by 37% to EUR170.7m. Operating margins remained flat
at 25%. Strong cost control on other line items coupled with increases in total
operating revenues resulted in operating profit increasing by 34% to EUR443.0m
compared to the nine months ended December 31, 2005.
Total operating revenues increased by 33% to EUR1,749.1m whilst passenger
volumes increased by 22% to 32.4m. Total revenue per passenger increased by 9%
in the period due to a combination of higher average fares (including checked in
baggage charges) and strong ancillary revenue growth.
Scheduled passenger revenues increased by 32% to EUR1,489.7m due to a
combination of higher passenger numbers on existing routes, the successful
launch of new routes and a 9% improvement in average fares (including checked in
baggage charges).
Ancillary revenues increased 38% to EUR259.5m, a faster growth rate than
passenger volumes, reflecting a strong performance in non-flight scheduled
revenues, on-board sales, other ancillary products and a one off receipt of a n
early termination payment from our hotel provider.
Total operating expenses increased by 33% to EUR1,306.2m due to the increased
level of activity and, in particular, higher fuel and staff costs. Total
operating costs were also adversely impacted by an increase in the average
sector length, whilst higher US dollar fuel prices were partially offset by the
strength of the euro versus the US dollar exchange rate and lower fuel burn
resulting from the newly installed winglets.
Staff costs have increased by 37% to EUR170.7m primarily due to a 32% increase
in average employee numbers to 3,915 during the period and the impact of pay
increases granted. Employee numbers rose due to an increase in pilot crewing
ratios as a result of continued increases in average sector length. Pilots, who
earn higher than the average salary, accounted for 42% of the increase in
employment during the period.
Depreciation increased by 17% to EUR108.2m due to an increase in the size of the
'owned' fleet from 77 to 90, offset by a lower amortisation charge due to the
retirement of Boeing 737-200 aircraft and the positive impact of a new engine
maintenance deal on the cost of aircraft amortisation. The strengthening of the
euro against the US dollar exchange rate also had a positive impact on the
depreciation and amortisation charge relating to new aircraft deliveries.
Fuel costs rose by 46% to EUR511.9m due to an increase in the number of sectors
flown, a 5% increase in sector length, and a significantly higher average US
dollar cost per gallon of fuel. The increased costs were partially offset by the
positive impact of the strengthening of the euro versus the US dollar during the
year and a 2% reduction in fuel consumption due to the installation of winglets
on part the majority of our Boeing 737-800 fleet.
Maintenance costs increased by 32% to EUR32.1m, faster than the increase in the
number of hours flown, due to an increase in the number of leased Boeing 737-800
aircraft from 17 to 30, partially offset by the improved reliability of the
Boeing 737-800's operated, a lower level of maintenance costs incurred due to
the retirement of the Boeing 737-200's and the positive impact of the
strengthening of the euro exchange rate against the US dollar.
Marketing and distribution costs increased by 42% to EUR15.9m due to a higher
level of marketing activity and related expenditure compared to the previous
year as the number of routes operated rose by 64% to 381 at the period end and
the number of bases increased by 2 to 17.
Aircraft rental costs increased by 32% to EUR40.9m reflecting an additional 13
aircraft on operating lease during the period.
Route charges rose by 17% to EUR146.1m due to an increase in the number of
sectors flown and an increase of 5% in the average sector length, offset by a
reduction in enroute charges in certain EU countries.
Airport and handling charges increased by 25% to EUR204.7m, which was higher
than the growth in passenger volumes and reflects the impact of increased costs
at certain existing airports, particularly at our Dublin base which has a much
higher average cost per passenger, offset by lower costs at new airports and
bases.
Other expenses increased by 24% to EUR75.6m, which is lower than the growth in
ancillary revenues, due to improved margins on some existing products and cost
increases on some indirect costs.
Operating margins remain flat at 25% due to the reasons outlined above whilst
operating profits have increased by 34% to EUR443.0m during the period.
Interest receivable has increased by 60% to EUR43.8m in the period due to the
combined impact of higher levels of cash and cash equivalents and increases in
average deposit rates earned compared to the same period last year.
Interest payable increased by 12% to EUR62.1m due to the drawdown of debt to
part fund the purchase of new aircraft and higher floating interest rates.
Notes to the Financial Statements
1. Accounting Policies
This period's financial information has been prepared in accordance with the
accounting policies set out in Ryanair's consolidated financial statements
for the year ended March 31, 2006, which were prepared in accordance with
International Financial Reporting Standards ("IFRS") as endorsed by the EU.
The comparative financial information for the nine month period ended
December 31, 2005 has been restated on a consistent basis.
2. Approval of the Preliminary Announcement
The Audit Committee approved the consolidated financial statements for the
half year ended December 31, 2006 on February 2, 2007.
3. Generally Accepted Accounting Policies
The Management Discussion and Analysis of Results for the period ended
December 31, 2006 and the comparative period are based on the results
reported under the Group's IFRS accounting policies, as adjusted for certain
exceptional items.
4. Available for Sale Securities
During the period the Company acquired a 25.2% stake in Aer Lingus at a cost
of EUR342.2m. This is reflected at market value at December 31, 2006 at
EUR364.8m.
5. Accounting for Share-Based Payments
Under SFAS No. 123R, which was adopted by the Company on April 1, 2006,
the Company is required to account for share-based employee compensation
using a fair value based method. The Company has elected to use the
Binomial Lattice option pricing model to determine the fair-value of
share-based awards under SFAS No. 123R, consistent with that previously
used for pro forma disclosures under SFAS No. 123 ("Accounting for
Stock-Based Compensation").
The Company has elected to use the modified prospective transition
method as permitted by SFAS No. 123R and accordingly prior periods have
not been restated to reflect the impact of the revised standard. In this
period's financial information, the Company has, as a result of the
adoption of SFAS No. 123R, recorded incremental share-based compensation
expense of EUR2.7m in its US GAAP income statement.
Prior to the adoption of SFAS No. 123R, the Company measured
compensation expense for its employee share-based compensation plans
using the intrinsic method prescribed by APB Opinion No. 25. The Company
applied the disclosure provisions of SFAS No. 123, as if the fair value
based method has been applied in measuring compensation expense. Under
APB Opinion No. 25, when the exercise price of the Group's employee
share options was equal to the market price of the underlying share on
the date of grant, no compensation expense was recognised. If the
Company had applied the fair value recognition provisions of SFAS No.
123 to share-based compensation during the three month period ended
December 31, 2005, reported income under US GAAP would have changed from
EUR37.6m to EUR37.4m with resulting Net income per ADS, basic and diluted,
of 24.52 euro cent and 24.35 euro cent respectively.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
RYANAIR HOLDINGS PLC
Date: 5 February 2007
By:___/s/ James Callaghan____
James Callaghan
Company Secretary & Finance Director